Pacific Data Systems provided Internet connections for the U.S. territory's 40 schools, and the Guam Department of Education expected to be paid back through a federal program. But losing bidder GTA said documents show the Internet service doesn't meet the standards for reimbursement. GTA, which is owned by Advantage Partners LLP of Japan, is calling for an audit of the $258,000 per year, five-year contract.

About half of the schools are getting up to 10 megabits per second, but there are schools in rural areas that are getting speeds slower than that, said John Day, president of Pacific Data Systems. He said the schools that are reaching 10 Mbps can continue to qualify for reimbursements.

"We're working with the DOE to see what we can do to increase the capacity," he said. "It's more of a limitation on the facilities we have to use to deliver the service."

The vendor is providing temporary service with slower speeds because of infrastructure needed to meet reimbursement standards faces construction permitting delays, said Taling Taitano, deputy superintendent for finance. The Department of Public Works needs to give the company permission to trench public roads.

The department has paid $11,165 a month since July 2011, a total of about $200,000. "We are paying them at the level of service they provide," Taitano said. She said the speed is 100 Mbps at the department's network operating center.

The speeds are "sufficient to meet the schools' requirements," Day said.

Public Auditor Doris Flores Brooks said she will bring up GTA's concerns at a meeting later this month.